MARKET TALK: Bear, Bank One Deal Not Out Of Question
08 Jan 14:55
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:53 (Dow Jones) Talk that Bank One (ONE) may acquire Bear Stearns (BSC) is
"fairly plausible," but the probability of a deal is low, says Sean Ryan, bank
analyst with Fulcrum Global Partners. Ryan says Bank One investors appear to be
losing patience with the bank's "turnaround story, nearly two years into
(Chairman and CEO) Jamie Dimon's tenure, which could increase Dimon's stated
desire to pursue acquisitions, as a means of delivering growth that continues
to elude the core franchise." Ryan views Bear Stearns as "an exceptional firm
and a potentially good fit with Bank One." But, generally, the odds are always
against any specific deal occurring, he says. (JAW)
2:42 (Dow Jones) A bankruptcy court will likely approve the sale of e.spire
Communications' (ESPIQ) CyberGate subsidiary to the company's chief executive
for $22.88 million. The company reviewed the terms of the sale with the
presiding judge at a hearing Tuesday morning. With no objections to the sale,
e.spire said it needs some time to iron out the details of the sale with its
debtor-in-possession lenders. The $22.88 million bid by CEO George Schmitt,
also the company's chairman, was selected as the highest and best bid at the
company's auction on Monday. (TB)
2:29 (Dow Jones) eBay (EBAY) reports next week, and Schaeffer's Investment
says the company has exceeded earnings expectations by an average of 36% for
the past five quarters. Technically, the stock has some work to do. The $70
level has been a pest for the shares, which have not closed a month above that
level since April of 2000. That said, the stock is holding support at the
10-week moving average, which has acted as support since mid-October.
Schaeffer's analyst Jocelynn Drake says the shares may soon find themselves in
a face-off between support from moving average and overhead resistance at $70.
With a short-interest ratio of just 2.49, it's not likely short covering will
boost shares through $70, but whenever that area is topped, the stock should
have plenty of room to move higher. EBAY off 0.5% at $66.50. (TG)
2:10 (Dow Jones) N.Y. Fed head McDonough says the data point to an economy
that's finding its bottom. He sees no threat of contagion from Argentina. (MSD)
2:01 (Dow Jones) Merrill Lynch analyst Judah Kraushaar trimmed his 2002
earnings outlook for Citigroup (C) and FleetBoston Financial (FBF), citing
potential risk to the Argentina economic situation. He lowered Citigroup to
$3.30 a share from $3.35, and FleetBoston to $3.15 from $3.25. "Argentina
represents limited credit risk for both of these companies and both have
probably already set aside credit reserves for the deteriorating situation,"
Kraushaar said. (CUB)
1:48 (Dow Jones) ABN-AMRO's Ken Leon upgraded Scientific-Atlanta (SFA) to buy
from hold, concluding the worst is behind the cable set-top box maker. "SFA's
core business in North America should improve in the (second half of 2002),
especially with easier comparisons," Leon says. He particularly likes the
company's prospects in the German cable market, with transmission revenues
adding $81 million in calendar 2002 and $260 million in calendar 2003. (JDB)
1:34 (Dow Jones) There's a "lot of reassessment of the (economic) landscape"
going on right now in interest rate futures products, says Michael Wallace, a
senior economist with Standard and Poor's MMS International. Plays seen so far
seem to indicate participants believe they may have overestimated the degree of
tightening necessary in summer but underestimated next year, he says. (CMN)
1:26 (Dow Jones) Merrill Lynch revisited its view of the household-products
and personal-care industries, in response to Argentina's economic turmoil. Avon
(AVP) has the largest exposure in the group tothat country, according to
Merrill, which cut Avon's 2002 EPS estimate by 4 cents to $2.28 a share; the
investment house maintained a buy rating. Merrill notes Avon shares already
reflect much of this profit cut. Because of lower Argentine exposure, other
companies didn't get an earnings cut. Shares off 0.6% at $44.50. (NBB)
1:15 (Dow Jones) Coach (COH) is due to report its 2Q, or "holiday quarter",
sales results on Wednesday morning, and the shares were recently up 4% at
$41.85. Lehman says its 92c 2Q view for the luggage retailer "could prove quite
conservative." Reiterates strong buy and ups 12-month price target to $48 from
$42. "Coach was a hot item for Christmas shoppers," adds David Lamer, an
analyst at Ferris Baker Watts. "The stores look pretty clean on fall product,
and they were not aggressive on sales promotions at all." Lamer currently
expects the company to earn 93c a share, in keeping with the Street's view.
(JMC)
1:02 (Dow Jones) Massey Energy (MEE) widened its two-month operating loss
view after the close of trading Monday, and Merrill Lynch responded with a
downgrade Tuesday. Merrill notes that Massey shares "will tread water until
management begins to meet their own preliminary expectations." Merrill cut its
2002 sales estimate to 50M from 54M tons and raised its average-cost-per-ton
expectation to $25.50 from $24.60. Merrill also notes that troubles don't
appear to be industrywide, but a problem specific to Massey. Its shares are the
second-biggest decliner on the NYSE, down 18.9% to $18.03. (NBB)
12:49 (Dow Jones) Fed's Ferguson skips commenting on the U.S. economy in his
speech, and weighs in on his disinterest in more transparency in Fed
activities. He also pours water on inflation targeting as a tenet of U.S.
monetary policy. (MSD)
12:42 (Dow Jones) Meredith (MDP) CFO Suku Radia reiterated Tuesday at a
Salomon Smith Barney Media Conference that the company expects earnings for the
2Q, ended Dec. 31, 2001, to be in the range of13 cents-17 cents a share. Radia
says the company doesn't have enough visibility to comment on the full year due
to the current economic uncertainties. The CFO said a forward-looking
advertising update and guidance for fiscal 3Q will be provided on Jan. 29. (CC)
12:34 (Dow Jones) After months of waiting, there is some news regarding the
hordes of lawsuits by doctors against various health insurers now pending in a
Miami federal court. A panel of federal appeals court judges is slated to hear
oral arguments tomorrow from attorneys representing managed care companies
hoping to overturn a ruling that forces some doctors to arbitrate their
lawsuits against health insurers and allows others to proceed with their
litigation. The U.S. Court of Appeals in the 11th Circuit in Atlanta issued a
stay in June after some HMOs, including Humana (HUM), Pacificare Health (PHSY),
UnitedHealth Group (UNH), and Wellpoint Health (WLP), appealed Moreno's ruling.
A final decision is likely before May and could meaningfully effect the
provider track litigation, according to Morgan Stanley Dean Witter analyst
Christine Arnold. (JJO)
12:25 (Dow Jones) Enterprise Oil (ETP) is up 23% at $26.15, after the company
confirms it has received "unsolicited approach from a third party regarding
possible offer." One analyst in London says, "We don't have a clue who the
third party referred to by the company is and we're checking the market for
short sellers (of other stocks)." (TRF)
12:17 (Dow Jones) AOL Time Warner's (AOL) warning of lower-than-expected 2001
and 2002 results Monday came with a small surprise. The company said its
results would no longer include iPlanet, a software joint venture with Sun
Microsystems (SUNW) that arose from AOL's acquisition of Netscape back in 1999.
Apparently, it was a lucrative little operation: it contributed to AOL $400
million in revenue and $320 million in cash flow during 2001. One analyst
called the elimination of such numbers "rather disconcerting."(PDL)
(END) DOW JONES NEWS 01-08-02
02:55 PM |
